Input Tax Credit not to be allowed in certain cases.

21 (1) No credit of any amount of input tax shall be allowed in respect of goods which-

(a) are brought or received by any dealer from any place outside the State whether such place is situated within the territory of India or outside such territory;

(b) have been purchased without payment of tax either under the Uttar Pradesh Trade Tax Act, 1948 or under the Uttar Pradesh Value Added Tax Ordinance, 2007;

(c) have been purchased, on any date beyond a period of six months ending on the day preceding the date of the commencement of the Ordinance, by a dealer who is liable for payment of tax with effect from the date of the commencement of the Ordinance;

(d) have been purchased, by a dealer who has become liable for payment of tax on any date after the date of the commencement of the Ordinance, on any date before the date on which dealer has become liable for payment of tax, but on or after the date of commencement of the Ordinance and beyond a period of six moths ending on the date preceding the date on which such dealer has become liable to pay tax;

(e) have been purchased from within the State, within a period of six months ending on the day preceding the date of such commencement, by a dealer who is liable for payment of tax with effect from the date of the commencement of the Ordinance but the dealer does not possess purchase invoice issued by the selling registered dealer;

(f) have been purchased from within the State, on any date before the date on which dealer has become liable for payment of tax, by a dealer who has become liable for payment of tax on any date after the date of the commencement of the Ordinance but within a period of six months ending on the date preceding the date on which such dealer has become liable to pay tax but dealer does not possess a sale invoice, bearing his name and complete address, issued by the registered selling dealer;

(g) have been purchased by a dealer, within a period of six months ending on the day preceding the date of the commencement of the Ordinance, who is liable for payment of tax with effect from the date of such commencement, from within the State in the circumstances in which such dealer has been liable to pay tax on purchase of such goods, but the dealer, fails to prove that tax has been paid on purchase of such goods under the Uttar Pradesh Trade Tax Act, 1948;

(h) have been purchased within a period of six months ending on the day preceding the date of the commencement of the Ordinance by a dealer who is liable for payment of tax on and from the date of such commencement and where such goods have not suffered levy of tax under the provisions of the Uttar Pradesh Trade Tax Act, 1948; or

(i) have been purchased after issue of Taxpayer's Identification Number but without obtaining tax invoice;

(j) have been purchased after obtaining tax invoice but copy of tax invoice, marked as Original is not available and such purchase is not verifiable from the list filed by the selling dealer along with tax return; or

(k) have been purchased by a dealer in the period commencing on the date on which such dealer has become liable to pay tax and ending on the date preceding the date on which Taxpayer Identification Number issued to him but the dealer does not possess a sale invoice, issued by selling dealer, bearing name and complete address of such dealer; or

(l) are taxable goods, other than non-vat goods, but sale of such goods is not liable to tax in the hands of the purchasing dealer; or

(m) are purchased after cancellation of registration certificate of the dealer; or

(n) are capital goods within the meaning of clause

(e) of section 2 of the Ordinance and such capital goods-

(i) have been purchased by a dealer on any date before the date on which he has become liable for payment of tax;

(ii) have been purchased by a dealer for use or consumption in the manufacture of any exempt goods where such exempt goods are not sold in the course of the export of the goods out of the territory of India; or

(o) are capital goods but such goods, for the purpose of section 13, do not fall under the category of capital goods as defined in clause

(f) of section 2 ; or

(p) are captive power plant or parts, components or accessories of a captive power plant; or

(q) are taxable goods mentioned or described in column (2) of Schedule-IV;

(r) are capital goods or heavy earth movers used by a dealer in the execution of works contract;

(s) are motor vehicles or any other vehicle, used for carriage of passengers or goods or both; or

(t) are air coolers, air conditioners, electric fans, heaters, air circulators, water coolers, water purifiers used in factory or workshop where the same are not connected with manufacture or processing, packing of goods for sale by the dealer;

(u) are goods used in civil construction work related to office premises or furniture, fittings, office equipments, air coolers, air conditioners, electric fans, heaters, air circulators, water coolers, and water purifiers not connected with manufacturing process; or

(v) are parts, components, accessories or consumables which are used for maintenance, repair or running of any goods for which facility of input tax credit is not admissible; or

(w) are held by a dealer in opening stock, in the same form and condition in which those were purchased, on the date on which period of composition under section 6 commences; or

(x) are goods which have been used or consumed in manufacture or processing of finished goods or semi-finished goods or in packing of such finished or semi-finished goods held by the dealer in opening stock on the date on which period of composition under section 6 commences; or

(y) are held by a dealer in closing stock at the time of discontinuance of business in the same form and condition in which those were purchased;Or

(z) are goods which have been used or consumed in manufacture or processing of finished or semi-finished goods or in packing of such finished or semi-finished goods held by the dealer in closing stock at the time of discontinuance of business; or

(aa) are used or consumed in packing of any goods where such goods belong to any other person; or

(ab) are used or consumed in manufacture or processing of goods or in packing of such manufactured or processed goods where such goods are manufactured or processed or packed for any other person; or

(ac) are used or consumed in the manufacture or processing of any taxable goods other than non-vat goods or in packing of such manufactured or processed goods or any other goods where sale of the manufactured or processed goods or such other goods is not liable to tax in the hands of the purchasing dealer; or

(ad) have been re-sold during the period of composition under section 6 ; or

(ae) have been used or consumed in manufacture or processing of goods and such manufactured or processed goods have been sold in the period of composition under section 6 ; or

(af) are gifted or otherwise distributed free of cost or lost, destroyed or stolen; or

(ag) are used or consumed in manufacture or processing of any goods or packing of such manufactured or processed goods and such manufactured or processed goods are gifted or otherwise distributed free of cost or lost, destroyed or stolen; or

(ah) are returned to selling dealer within a period of six months from the date of purchase; or

(ai) are used in packing of any exempt goods and such exempt goods are not sold in the course of export of the goods out of the territory of India; or

(aj) are used in manufacture or processing of any exempt goods or in packing of such manufactured or processed goods and such manufactured, processed or packed goods are disposed of in any manner other than by way of  sale in the course of the export of the goods out of territory of India; or

(ak) are used or consumed in manufacture or processing of any non-vat good or in packing of any non-vat goods; or

(al) are any other goods in respect of which or any other circumstances in which any provision of the Ordinance does not permit benefit of input tax credit

(2) In respect of goods which are -

(a) consigned outside the State otherwise than as a result of a sale in the same form and condition in which those were purchased; or

(b) used or consumed in manufacture or processing of any taxable goods or in packing of such goods and such manufactured or processed goods are consigned outside the State otherwise than as a result of a sale, credit of part amount of input tax obtained by using expression {(P x R) / 100}, shall not be allowed:

Where-

(i) P is the purchase price of the goods consigned or used or consumed, as the case may be;

(ii) R is rate of tax applicable to the commodity under the Act if it is less than 4 and in other cases is equal to 4.

(3) No input tax credit shall be allowed on the basis of a tax invoice or sale invoice which has been obtained without making actual purchase of goods.

(4) No credit of amount, of input tax in respect of which purchasing dealer has received credit note from the selling dealer, shall be allowed as input tax credit.

(5) No credit of amount of input tax in respect of stock shall be allowed if the dealer fails to submit the inventories within prescribed time and in prescribed Form.

(6) No credit of amount of input tax in respect of Development Tax paid or payable under section 3H of the Uttar Pradesh Trade Tax Act 1948, shall be allowed in any case or in any circumstances what so ever

(7) No credit of amount of input tax in respect of goods purchased before commencement of the Ordinance shall be allowed if such goods are exempt under the Ordinance.

(8) No credit of amount of input tax in respect of goods purchased before the commencement of the Ordinance, held in the opening stock on the date of such commencement, shall be allowed in case of the dealers who had availed the facility of compound scheme issued by the State Government in exercise of the power under section-7D of the Uttar Pradesh Trade Tax Act, 1948.

(9) No credit of amount of input tax in respect of goods purchased before the commencement of the Ordinance, held in the opening stock on the date of such commencement, shall be allowed in case of the dealers who had availed the facility of exemption on the purchase or on the sale under clause (c) of section 4 of the Uttar Pradesh Trade Tax Act, 1948.

(10)No credit of amount of input tax shall be allowed in case of paddy used in manufacturing of rice for sale if dealer has availed the benefit of provision of clause (c) of section 15 of the Central Sales Tax Act 1956

(11)No credit of amount of input tax shall be allowed on the purchase of goods and held in opening stock on the day when the such goods has been declared exempt under section 7 of the Act or such goods has been included in Schedule I.

(12)No credit of amount of input tax shall be allowed in respect of purchases of vat goods which has been sold to registered dealer by a registered dealer and such selling registered dealer has not issued tax invoice.